Service Business Strategy

Strategy

As Europe is moving into the next economic cycle, Service Managers are now experiencing immense pressure to deliver profitable growth. The challenge is to create a mature service capability that will provide the customer with a unique branded experience, ensuring value for money and brand loyalty.

As Europe’s economic fortunes plummet, effective management of your service business becomes integral to ensuring profit. Amidst increased pressure to deliver a mature service capability, the financial status quo provides the opportunity to review your modus operandi and embrace powerful new incentives to enact a total service transformation. Without good leadership however, new initiatives tend to veer off track. Leadership is, more often than not, the major differentiating factor in a company’s level of success. The question becomes: What makes a successful leader in the services and how do you lead your company to profitable growth? At Noventum, our consultants have defined four priorities to first-rate service leadership; a good Strategy, focus on the Customer Experience, attention to the virtues of (what we call) the Service Factory, and developing your Employees’ skills and understanding. These considerations will be addressed through our executive Service Leadership Course.

 It is seen as one of the major challenges to move more intelligence and knowledge from the field to support centres or remote centres, becoming stronger and stornger in remote monitoring, predictive maintenance, remote maintenance, remote diagnosis, improved work preparation dispatching, remote resolution of issues and also remote application support.

Besides benefits in productivity and efficiency, it is a means of developing new (value added) services, hence helping service proiders to face commoditisation of products and basid product related services.

Mergers and Acquisitions (M&A), are they an effective approach to value creation?

The main purpose of M&A is to add value to shareholders, based on the assumption that to merge or make an acquisition will produce higher corporate potential value than the value of the two separate companies.

The logic is quite simple: Companies can benefit from combining the two companies in fixed cost reduction available from economies of scale. Most examples involve purchase of a competitor; or companies in similar core activities, however, evidence from different source, highlights that only one in three M&A deals achieves the expected increased corporate value. Recent research reveals results were even worse in Europe: in the last three years, less than one in ten transactions can be considered successful.

Research carried out with a number of the best performing companies; found that the majority of senior managers were visiting up to a hundred customers a year, believing that there is a high correlation between relationship-building and customer satisfaction and customer loyalty, if supported by good service.  The same research also highlighted that the senior manager could occasionally be seen as a soft-touch by the customer if the-y gave away hard-won margin on a contract, which underlines the absolute necessity to treat customer centricity professionally and not believe a few positive customer-focused actions will win hearts and minds.

The latest research from Noventum consultants appears to have got to the heart of what drives success in the service industry today and what is required to continue driving it into the future. The success comes from constructing a successful strategy and delivering it into an effective operation. Creating loyal, satisfied customers, while strongly growing revenue and profit.

The research outlined in Figure 1 has shown as is normally the case that some of the strategies are proving to more successful than others. The two most successful have focused directly onto the customer interface, staff and customers.

Sometimes we take for granted what is in front of us.  It is amazing that businesses do not utilise members of staff who show great skill to develop others.  In this article Steve gives us some insights into how this is being achieved by some high performing companies.  

The conclusions from our research in the latter half of 2008 identified that brand-driven service strategies produced the most profitable growth. We discovered that customers base their choices predominantly on relationship values. Examples are the trust a customer places in the service provider, or the image of being the market leader for customer service. One might argue these are fairly abstract concepts.