The Service Design Group has helped mid-market and enterprise B2B companies make servitization, digitalization and as-a-service transformations real since 2011.
While it’s generally accepted that the future of most businesses and most industries is a story about services, we’re continually amazed by the confusion and inaction – across all levels of an organization – when it comes to doing something meaningful with services. Top of that list is confusing providing service with a service offering. The two couldn’t be more different! Organizations must understand this in order to effectively move forward with a servitization, digitalization or as-a-service transformation.
Troubleshooting, care and feeding are table stakes.
What you’re doing is customer service or “Service as a Necessity.”
When we start working with our clients, they typically have an existing customer success, field service or technical support group. Call these teams what you will, their mission is supporting trials, product startup, initial delivery and deployment, ongoing troubleshooting and problem resolution, and sometimes, further optimization. These teams provide a vital frontline touchpoint with your customers. They know your accounts inside and out, spot competitive threats and identify new sales and product enhancement opportunities. These teams even go above and beyond for your customers, helping with things well beyond the scope of your product. This is all good, but, herein lies the problem and confusion! While all of this activity is undoubtedly providing a service nothing here is a service! What you’re doing is customer service or “Service as a Necessity.” While this might create positive feelings for your customers and implied value for your organization, it does not create hard business results. Where’s the recurring revenue, stickiness and elevated enterprise value?
Show me the SKU. Show me the money!
If all you’re doing is necessary customer service… you’re not moving your company through an as-a-service transformation.
Does the customer service you must provide for your product – to ensure it performs as designed and expected – have a SKU and a price? Probably not (and it probably shouldn’t). Do you have anything that you consider a service that does have a SKU and a price? Likely not! (In our experience, most companies do not, beyond maintenance agreements and contracts.) Asking this simple – yet powerful – question of “Do I have a service or services that come with a SKU and a price?” is one of the best ways to cut through the noise and confusion surrounding servitization, digitalization and as-a-service transformation. It provides a clear, honest assessment of where you are vs. where you need to be. In other words, if all you’re doing with service is necessary customer service – and you have ZERO services that come with a SKU and a price – you’re not building services or moving your company through an as-a-service transformation.
So what? What next?
If you’re reading this and thinking “We already have services, we just don’t charge for them” we’d encourage you to think again. If you’re reading this and thinking “wait, I should charge for service?” we’re here to tell you “Yes!” Yes, you must start creating service offerings and monetizing them (but don’t confuse this with nickeling and diming customers for the necessary customer service you must also continue to provide). To get started, the most important first step is embracing the reality that providing service does not equal a service. Accepting this enables your customer service activities to continue the good work they do while also protecting space to go attack servitization, digitalization and as-a-service transformation, which you must do if you want to survive the future.
