Many B2B companies provide their after-sales services free of charge. The focus is often not on generating sales this way. Yet the realities in the service business are changing in the course of digitalization. Numerous new service models and revenue options are emerging. Yet how can a company identify a digital service’s potential for success without losing their bearings amidst the sea of options?
This was the exact situation when a global market leader in medical technology reached out to Homburg & Partner. The company’s mission was to offer innovative services to their customers to differentiate themselves from the competition, strengthen customer loyalty and generate additional revenue. In order to achieve these goals, solutions were designed along a customer service journey tailored to specific customer segments. The willingness to pay was also identified. In this way, a comprehensive service portfolio of digital solutions was created that is based on global customer needs.
“The significance of the service business as a revenue and profit generator on the one hand, and as a differentiating factor and tool for customer retention on the other, continues to grow in many B2B sectors. Services are an essential factor for success especially for manufacturer of durable equipment and capital goods. Only companies that offer an excellent service quality to their customers along the entire customer journey and also monetize these will succeed on the market in the long term. Absorbing the willingness to pay in pre-sales services is and remains incomparably more difficult than in the area of after-sales services.”
The project started with reorganizing the existing initiatives. The customer already had work groups working on digital services. While these were innovative, they were mostly not managed centrally and not known throughout the company. In order to structure the existing activities, a list of all internal initiatives concerned with the design of services was fashioned. A comprehensive market analysis then followed to compare the direction of internal initiatives with the services that competitors and related industries offer. Building on the results of the analysis, a shortlist of especially promising service concepts was created.
The next step saw a surveying of our client’s A-customers to collect feedback on the service solutions included on the shortlist. The survey’s aim was to identify difficulties in the daily use of our customer’s systems and to determine how these pain points can be resolved by using digital services. The validation, refinement and design of the concepts for digital services then followed. A global project approach that took regional and state specifics into account ensured that solutions were not developed that shot past the complex reality. This process was discussed with the core team in workshops and via weekly coordination measures.
The Service Portfolio Roadmap represents the project’s visual core element and functions as a compass for concrete measures by providing an organization-wide basis for implementation. Some services can be gradually rolled out. For example, customers already see these as standard to a certain extent. However, they also offer opportunities for a price premium in further development stages.
From the project start, the client already had broad market knowledge about the customer-specific problems when it came to handling his systems. However, the bulk of the information was not structured. We made use of a so-called service journey as the structuring model for the project. It comprises the following eight points: installation, commission, training, maintenance, self-repair, troubleshooting, updating and optimization.
These were presented to our interview partners (our customer’s clients) to jointly identify prevalent problems along their personal service journey. Following that, the prevailing problems were consolidated into ten state-independent pain points, making it possible to address these challenges centrally and globally. It quickly became clear that a manufacturer who manages to solve all ten pain points can clearly stand out from the competition.
On the client’s side it was clear which customers ranked as A-customers, though there was no clear segmentation. We thus developed a segmentation logic to evaluate the A-customer based on five different dimensions that directly influence the individual need for digital services. With regard to the service journey, the customer segments mainly differed in internal topics such as the handling of training services and the willingness to solve problems independently. These customer segments were essential for the remaining course of the project in order to be able to offer services individually and yet in a standardized way at the same time.
Our client wanted to ensure that all customer needs were met in the best possible way. In the course of this, however, he became lost in the details of the design of his services. The determining factor for success was to identify services that were both important as well as urgent. These had to be designed in a way that both the scope (e.g. 24/7 service, number of contact points) as well as the nature (e.g. communication channels used) met the customer’s needs. Hence we established three service segments:
Considerable attention was paid to the last segment, in particular, as this concerns services that our client had not yet considered. In the course of the project, we managed to identify and design five entirely new concepts.
In the final step, the core task was to combine the knowledge gained into packages that can be commercialized. Taking into account segment-specific requirements, we created packages that address issues such as support and growth on the one hand and excellence and efficiency on the other. A service portfolio strategy with short-, medium- and long-term packages was defined and a corresponding service plan established.
If you would like to find out more about our expertise in the field of digital service solutions or discuss similar approaches for your company, simply spend a few seconds to leave an inquiry via our contact form. Our partner Karl-Hubertus Gruber will personally contact you promptly. Alternatively, you are welcome to email or call us!