People Are Talking
Strategic Service Management is not a new industry catchphrase or new software solution; it’s much more than that. Strategic Service Management is a fundamental shift in how companies conduct business. It’s a new mindset, a new way of thinking, a new customer-commitment-centric business strategy that is causing companies to completely reinvestigate the ways in which they manage their post-sale service businesses. This shift has elevated the post-sale service dialogue to a strategic level among company executives, board members, industry analysts and the media. Here is what they are saying:
“Strategic Service Management is the business strategy and philosophy that leading companies practice and followers fail to understand.”(Doug Derrick, Partner, Post-sale Service, Accenture)
“Globalization, cost pressures, and empowered customers are forcing businesses to distinguish themselves on the uniqueness of their products and the quality of their service operations. Increasingly, revenues, profits, and customer loyalty are being driven not by the initial product sales but by post-sale service and support.”(AberdeenGroup)
“Companies increasingly are using after-sales service as both a competitive weapon and a source of high-margin revenue. As a result, service chains are becoming mission-critical operations.”(Global Logistics & Supply Chain Strategies magazine, "When Companies Compete on After-Sales Support, Service Supply Chains Take Center Stage," March 2006)
“Service can add substantially to shareholder value. In fact, over time, service may actually contribute more to earnings than sales of the product do.”(Accenture in "From Cost to Profit," Inbound Logistics)
“Executives from firms in diverse industries, from high-tech and medical devices to consumer products, agree that service business affects not only profitability, but brand image, customer retention, customer loyalty, and ongoing cost of sales.”(AMR Research, “Obstacles and Opportunity Abound in Aftermarket Service: Time for Service Intelligence,” June 2006)
“A company that institutes a first-rate service management capability can increase its service revenues between 10 percent and 20 percent. Moreover, by making its service functions more efficient, a company can reduce operating expenses by 15 percent to 30 percent.”(Accenture)
“In many sectors, the service business contributes as much or more revenue and profit margin than the initial product sale.”(AMR Research, "Obstacles and Opportunity Abound in Aftermarket Service: Time for Service Intelligence," June 2006)
“Post-sales service is rapidly climbing to the top of the corporate priority list. Product-centric OEMs have historically viewed post-sales service as an inevitable cost of doing business, but with increasing pressures on product-based margins, leading companies looking for revenue growth, profit boosts, and competitive advantage are unfurling service-driven business models.”(AberdeenGroup)
“Customer satisfaction is inexorably linked to shareholder value. It is a truism: pleasing customers keeps them happy... and buying. With today's constrained budgets and constant earnings pressure, businesses simply cannot afford to lose valued customers.”(IBM Institute for Business Value)
“Up to 70 percent of complainers will return to your business if their complaint is resolved. Up to 95 percent return if the problem is resolved quickly.”(IBM Institute for Business Value)
“Studies by Walker Information showed that while 90% of customers reported being satisfied, only 50% reported buying from the company again. They found customers buy because of their experience during the sales process, yet the propensity to repurchase or remain loyal is determined many times by the experience customers have in the after-sales/service experience. In other words, the customer experience doesn't stop at the sale.”(Dr. Natalie Petouhoff, "The Benefits of Making Customer Advocacy Job #1:Happy Customers.")
“Most CFOs focus on forecasting, budgeting, and monitoring business activities that are central to the overall financial health of the corporation. For most OEMs, these have traditionally been product-driven activities. But with increasing commoditization of products and shredding of product-based margins due to global competition, forward-thinking CFOs are keeping closer tabs on the financial contributions from post-sale service.”(Mark Vigoroso and Sumair Dutta, "The CFOs View of Service Chain Management," AberdeenGroup, July 14, 2006)
“Users are looking to move beyond cost containment solutions to offerings that address revenue enhancement. We clearly move beyond a point solution when a CFO can quantify improved customer loyalty and enhanced profitability to the bottom line. This is what Servigistics is doing.”(Y2G Associates)
“Electrolux is committed to delivering quality and reliable service to our industry-leading clients, and we wanted a proven solution that would streamline our service operations, maximize performance, and help us raise the bar on service.”(Dave Rinker, General Manager, Electrolux Consumer Services Group)
“Servigistics has clearly showed momentum and a strategic vision that has seen it pull ahead in the market the past year.”(AMR Research - "Click Commerce to be Acquired by Illinois Tool Works - September 2006)
“Delivering quality and reliable service for all major appliance brands is a significant growth opportunity for Maytag. To fully capitalize on this opportunity, we need industry-leading technology to further enable best-in-class processes, maximize performance and deliver market-leading service to customers.”(Art Learmonth, President, Maytag Services)
“Good service is no longer sufficient. To remain competitive during the forthcoming decade leading companies must delight their customers. To do this, service must become a business strategy rather than a low-level tactical function”(Robert Garratt, Associate Partner, Supply Chain Management, IBM Global Business Services)
“Increasingly, it's going to be hard for the big vendors to really outpace the industry, because the real growth is going to come from the more-disruptive players within software.”(Art Brendan Barnicle, an analyst at Pacific Crest Securities, a boutique investment bank focused on technology)
“Corporate technology officers, too, say that the hottest new pieces of the software market come from small, innovative firms.”(Wall Street Journal, January 23, 2007; Page C1)