The idea of “service delivery” as we know it is in transition, with many forward-thinking organizations moving toward a new approach that reimagines the traditional provider/customer relationship.
The term “outcome-based service” has likely flashed across your radar screen; perhaps you’ve even read some insider commentary touting it as the wave of the future, but lacking actionable takeaways. Outcome-based service is a whole new way of looking at service delivery — one that can seem a bit daunting.
So today we’d like to drill down on a few key actions — four, for starters — that you can take to move toward reaping the significant benefits of outcome-based service delivery. These four new actions are closely connected to four traditional pieces of advice for improving service delivery:
- Provide better communication
- Negotiate service-level agreements
- Identify and address barriers to quality service
- Respond efficiently to specific customer concerns
This conventional wisdom is helpful as far as it goes, but future-focused service providers are finding ways to go beyond incremental improvements and instead transform the relationship between their frontline service delivery people and their customers.
The goal of this article is to share some insight designed to help you determine whether this type of future-focused shift feels right for your organization and, if so, to provide some tangible strategies to help you get there.
1. Don’t just provide better communication to your customer.
Engage your customer in communication designed to gain a deeper understanding of their big picture.
Imagine if your field service technicians and other frontline service providers were equipped not only with the tools and expertise to handle immediate issues and problems, but also with the communication skills to turn every interaction into an opportunity to gain important insights into the customer’s deeper needs and goals — to better understand what we call the customer’s “big picture.”
The big picture will differ from client to client, but typically includes such short- to long-range objectives as focusing most intently on:
- Reducing costs
By equipping your technicians with enhanced interpersonal communication skills and encouraging them to develop a more thorough understanding of each customer’s big picture, you enable them to do more than simply get the job done and move on to the next service call.
Instead, you empower them to:
- Discover new ways to help the customer
- Build an ongoing rapport as a trusted adviser, and
- Nurture a relationship that over time adds value for both parties
2. Don’t just create a service-level agreement between you and your customer.
Reimagine the traditional SLA “negotiation” model in favor of “collaboration” on an outcome-based agreement that balances both parties’ interests.
Yes, service-level agreements are a valuable and essential tool for providers and customers to codify expectations and specify the metrics by which service is measured, as well as to spell out remedies or possible penalties if the terms of the agreement are not met. However, metrics like response rate, first-time fix rate and equipment downtime no longer tell the whole story in a business world where customer expectations are shifting.
The enhanced communication strategies and heightened focus on customers’ big-picture goals discussed above can be used to lay the foundation for a new type of outcome-based agreement. Such agreements are now being put in place between some forward-thinking manufacturers and service providers and their customers.
The traditional SLA, with its emphasis on traditional metrics, is typically still part of the outcome-based agreement. However, the concept of service delivery is evolving toward a more collaborative type of contract agreement that — by focusing on each customer’s larger goals and rewarding providers for helping to achieve them — leads to longer, stronger, “win-win” partnerships.
Here’s an example from our own experience. A service supplier in the hospital equipment business was approached by a major customer that had been hit with a 20% reduction in reimbursement rates and wanted to cut the service agreement by a similar amount.
Leveraging an understanding of the customer’s big-picture challenges, the supplier saw an opportunity to help the customer use a suite of state-of-the-art productivity tools to improve its overall profit and cash flow from the utilization of the supplier’s equipment. A new outcome-based agreement was put in place and, as a result, the supplier avoided a potential $300,000 reduction in their service agreement and reinforced their position as a trusted partner.
3. Don’t just identify barriers to quality service at your organization.
Enable each of your team members to discover new opportunities for delivering exceptional, “above and beyond” service.
By encouraging your frontline service delivery people to continually develop a more comprehensive view of your customers’ big-picture objectives, you are essentially collecting “data” about how you can help them achieve their most important goals.
Such data can be used to discover new ways to help them during onsite visits. For example, field service techs on a call to fix a problem will be better equipped to apply their technical prowess to diagnose underlying issues that may be related to, or even causing, the immediate problem.
Discovering opportunities to deliver exceptional “above and beyond” service also hinges on doing some extra homework about the customer, their industry and their competition.
Doing so positions your organization to do much more than identify potential internal barriers to higher-quality service delivery. It opens the door to using your unique expertise to identify potential barriers to the client’s success — thereby adding value and further building the foundation for mutually rewarding, longer-term customer relationships.
4. Don’t just respond efficiently to specific customer concerns.
Anticipate current and future customer concerns and needs by being proactive.
As always, it is essential to respond quickly and efficiently to address specific concerns your customers may have about your products or services. However, this doesn’t mean just plugging in your predictive IoT technology and flipping switches or going onsite to fix a problem.
That’s an important part of it, of course, but leaving it at that represents a missed opportunity — or hundreds, or even thousands of missed opportunities — to interact with the customer in ways that deepen your understanding of how to deliver next-level service that differentiates you from your competitors.
Let’s look at one real-life example of how you can find ways to add value for customers by shifting from reactive to being truly proactive. In this case, a service engineer for a telecom network provider applied his deep knowledge of the customer’s big picture, as well as his own company’s capabilities, to address his customer’s strategic challenges and generate new business for his own company.
The telecom network provider’s customer was confronted by two conflicting cost-control challenges — reducing its internal team that was building out its network while also using fewer outside resources.
Instead of taking the usual course of simply cutting service levels while minimizing the impact on the customer, the supplier’s service engineer decided to take a proactive approach. He suggested that while his team was on-site performing standard site surveys, his team would also propose which on-site adaptations they could do more efficiently than the customer’s team.
To help expedite the process, the telecom network service engineer proactively documented all of the issues that would normally slow down the process from the customer side as well as from his own company. The new strategy delighted the customer, and to save on overall cost the customer actually ended up placing new orders for expanded services from its network provider without the usual slow and painful negotiation process.
Future-Focused Service Delivery [Additional Benefits]
In the past, field service training often has been split into two separate functions:
- Technical training that teaches service people how to provide new technical solutions, install new products, etc., and
- So-called “soft skills” training that focuses on customer interaction and “people skills.”
Future-focused customer relationship training for field service employees emphasizes, and unlocks, the essential connection between these two types of training, enabling field service techs to use their technical skills and their advanced knowledge of the customer to add value and build the relationship.
In addition to developing stronger, mutually beneficial relationships with customers, this forward-looking approach to improving service delivery also offers potential benefits when it comes to productivity, business outcomes and customer satisfaction.
Integrating customer relationship training and technical training enables your people to become trusted partners from an interpersonal as well as technical perspective. For example, with expanded knowledge of the customer’s needs and how they connect to the customer’s overall forward-looking business model, your team will be better positioned to use both your technological tools and onsite visits more efficiently and effectively.
Employee engagement is another benefit when you consider that your field service technicians are newly empowered to not just patch and fix problems, but to use their creativity and ingenuity by adding value in ways that enhance their status as trusted advisors in the eyes of their customers.
Best of all, nurturing customer relationships in this way ultimately leads to new, predictable, longer-term revenue opportunities. Why? Because even though your customer appreciates what you have done for them lately, what they care most about is having a reliable supplier who proactively helps them look around corners to create a winning future.
If all of this sounds good on paper, we should talk — because we have deep experience working with major companies across multiple industries to put the ideas and strategies outlined above into practice. (Learn more about our Total Customer Focus training programs.)
We have been providing hands-on, experiential customer relationship training to global field service teams for over 15 years. Contact us today to exchange ideas about how our customized programs can help you create new value for both your company and your customers.