Nick Frank, Consultant with Novetnum Service Management continues his exclusive series looking at building revenue from services...
Selling services, how difficult can it be? Talk to a product sales person: ‘Piece of Cake, but…’. Talk to the Services Sales specialist about their product colleagues; ’They don’t understand…. all they care about is the big deal’
In truth it’s not black and white, which is why it’s not so easy. Product Sales people can be very successful at selling services, if they are packaged as a product. For example I have seen great results for well defined service maintenance contracts, sold up front with the product. But I have also experienced complete frustration with some product sales people, as they struggle to sell managed services to more senior decision makers. Generally this because they do not fully understand the strategic growth issues the boardroom faces and focus on service features.
To find the best path for your business requires an in depth knowledge of your customer’s buying processes, your own service propositions and your people. Get the answer right and it’s possible to create tremendous momentum, where you can start to see growth rates of between 20-40% per year in your services business.
Easy words, but what about the reality. Lets look at the experiences of a world leader in packaging equipment, Bobst SA based in Switzerland. The Head of the Service Business Unit, Stephan März saw the opportunity to transform the Services into a sustainable engine for long term growth. Two years in and Parts & Service is starting to push past 6% annual growth. This growth has been led by a focus on services where contract penetration has doubled. Although he is mid- journey, some of the lessons Stephan has learned about energising service sales are a good guide for anyone making this transition:
- Technology leadership is not enough anymore: Spend time with the product sales force repeating this message. ‘Good Services are key to selling more Machines’. They will get it in the end, especially when you look at their incentives!
- Focus, Focus, Focus: Creating a separate service team gave service an identity and motivation. Bobst had gone as far as creating a separate Business Unit, which allowed Stephan to demonstrate who was making the money…and it was not the products! Dedicated marketing, sales and supply chain allowed him to develop and implement very effective service proposition quickly. A focus on sales people skills; who were hunters or farmers. And often a successful approach for complex equipment manufacturers, leveraging the customer perception of Regional Service Managers as trusted advisor’s, and using their skills to drive Service Sales.
- Communicate, Communicate, Communicate: It’s a major cultural change, but change does not happen overnight. Even though Stephan had 100% commitment from the CEO and the Executive team, he still had to work through the silos issues, dealing with jealousy, finger pointing, remuneration, profit & cost allocation and yes, car policy. Bobst worked very hard on team work with their product Sales colleagues, making sure roles and responsibilities were clear; and its beginning to work!
- Patience, Patience, Patience: Business is impatient for results, but service sales is in fact part of a long term transformation programme, where the business model, processes and people all need to be challenged. It takes time commitment and management skill to achieve the desired relationship and results.
If you are interested in how to sell service more effectively, why not look to attend Noventum’s next Service Sales Course or look at our article on ‘How to boost Service Sales at this link