Stepping Up to the New Services Economy: Ideas and Opportunities to Maximize Sales and Profits
By: Mark Hordes,
Co-Author of “S-Business: Reinventing the Services Organization”, Select Books, NY,NY
713 416 1781 office
Most people would agree that in periods of downturns in your business makes sense to re-examine your strategic focus to prepare for better times.
One major shift that is gaining momentum across product-centered companies is an exploration of how to transform an organization into a services-driven business.
Only a few years ago, services were primarily seen as cost centers, a necessary evil and a mostly misunderstood part of the organization.
Most product sales organizations anxious to close customer deals would give services away to entice the buyer to say “Yes.” With little knowledge and understanding as to the tremendous potential of creating strong margins for their service offerings and consistent profits, the practice of just throwing in services became the normal strategy. Boy, have things started to change!
Let’s consider some facts. Today, services account for more that one-half of IBM’s 440,000 employees. Furthermore, services contribute to 35 percent of computer industry revenue and 60 percent of profits.
Even manufacturing companies investing heavily into Six Sigma Programs to reduce costs and streamline operations are taking a serious look at the service side of their business too.
With so many opportunities in services, here are six ways your company can start a process to transform your organization into a high-performance, services-driven business:
1. Assemble a service’s steering committee.
Create a cross-divisional group chartered with the responsibility to map out the potential services strategy. This will help you better understand the significant impact the new strategy will have on the entire organization: IT, sales, marketing, field support, operations, human resources, finance and the services group.
Sound change and program management principles should be put into place as well, so that issues of integration, priorities for projects and resource allocations are managed in an effective and efficient manner.
2. Organize a “best practices” educational event.
Recently, in a discussion with a colleague from a well-known products company whose new managed services business strategy was somewhat bogged down, the executive made a comment that, “There are very few examples of companies out there that have succeeded in making the transition from products to services.”
Organizing an awareness workshop, conducted by a knowledgeable, services-focused subject-matter expert with change expertise, can be a very quick way to help organizations understand the drivers and forces that must be addressed before going forward in the process. If facilitated and conducted correctly, the experience will help guide your organization to seek out the following information:
Determine if a services transition is a good strategy for your company. Gain insight into high-performance companies that have successfully made the transition to s-business. Review specific best practices as they relate to strategy, operations, sales, marketing, delivery and people. Determine how to calibrate services success to the bottom-line. Build consensus with your colleagues as to issues and priority next steps. Identify immediate customer opportunities by reviewing what other companies have done and understanding the strategy or strategies they used to get there. Generate new profitable business.
3. Conduct a customer, employee and competitor readiness assessment.
An important step in the process is to gain an understanding of what the true “voice of your customer” is.
Gathering data from you current customers and future prospects as to their services issues, current usage and how those services fit into their future strategic plans can provide you with important information as to what services you should offer and how to price them. It can also help shape your overall service capabilities and plans.
Of course, determining the competitive landscape as well will give you important insights as to what you are up against in the marketplace and how you should craft your all-important market messages and value proposition.
Running focus groups with employees is also an excellent way to check the pulse of the organization since information can be generated as to change impacts, gap issues and opportunities to leverage your services business.
4. Revaluate your current marketing strategy.
Product marketing is very different than service marketing.
Do you fully understand how your brand is viewed in the marketplace? Are you seen as a pure product company that lacks credibility to deliver services? Are your market messages tied to the critical issues your customers want and need? Can you accomplish brand congruence inside and external to your company? Does your marketing group work well with your sales group? Do you understand how to create a value proposition for new services that quickly grab customers’ attention and bring them to you, a “pull” versus “push” marketing strategy?
Placing the correct bets on services marketing will be one of the most important things you do.
Make sure you reduce all the potential risk before you go forward so that your marketing messages ring loud and clear to the ears of the customers and prospects.
5. Make everyone is skilled on how to sell services.
Selling services is vastly different than selling products. Successful services companies know that for product sales professionals to make the transition to successfully selling services, new knowledge and skills are required.
The answer lies in developing educational programs and in aligning the sales environment to reinforce the new desired behaviors.
Skill-building in “selling the invisible” influencing C-level executives, utilizing an effective qualifying checklist and learning how to sell complex professional services engagements are only some of the results you will achieve as an outcome of services sales training.
Training your staff in services sales is truly one of the best investments you can make and is a standard practice of top-performing s-businesses.
Think about how many implementers on client sites could be working on your behalf to capture new opportunities, “low hanging fruit” and ideas for expanded services — if they only had business development skills. This is a huge opportunity waiting to be harvested!
6. Practice the 100 percent rule.
If you always get 100 percent of each person’s talent and motivation everyday, you have reached the best that can be given. The difficulty is that most organizations have 70 percent of their employees engaged in some kind of internal struggle: worried about lay-offs or having conflicts with other functional areas, productivity concerns, political issues, cultural concerns, etc.
As a result, only 30 percent of everyone’s motivation and talent is directed where it should be — toward the customers.
A successful organization tries to shift this balance to a healthier, more productive, 10 percent inside — 90 percent outside. Taking your organization's temperature from time to time is a good way to uncover the handful of issues that block an outward-looking perspective.
Conducting focus groups across the entire organization is one of the best ways to identify the barriers, perceptions, feelings and ideas your staff have as to how to move the company forward toward your services vision with their support and commitment. Now that’s 100 percent!
Here’s to new beginnings…
If you believe in new beginnings, then the story continues, and the journey moves forward — not to a conclusion, but to an adventure into terrific opportunities in the exploding services economy.
Taking the first step is always difficult, but the potential benefits of the service business reality is well worth your time and effort.
Training on Successfully Selling Services
Mark Hordes, MHMC,LLC, Delivers 1 ands 2 Day Workshops for Clients as Internal Development Programs for Product Sales and Services.
"How to Sell Services: Tools and Techniques for Successfully Selling Services"
Contact Mark Hordes 713 416 1781 firstname.lastname@example.org for program details and to arrange a workshop for your sales organization