By Dan Gettens, Chief Research Officer, OnProcess Technology
For some companies, optimizing the Service Supply Chain is becoming more important.
This is not surprising. The Service Supply Chain is wide in scope — the people, processes and technology for servicing the end customer after the sale. Components may include customer care, technicians, systems, knowledge-bases, parts inventory, carriers, parts depots, parts suppliers, tech providers, business rules, service level agreements, metrics and analytics.
How would companies rate their performance for this initiative? Few have realized the promise of higher profitability, improved customer satisfaction and increased competitive differentiation.
Stuck at good? This is not uncommon among companies in diverse industries — Medical Devices, Cable & Broadband, Retail Services, Wireless, and Infrastructure Technology like computers / PCs, storage, networks, and communication equipment. However, achieving superior results is possible in Service Supply Chain management, just as some companies have demonstrated in managing the supply chain supporting manufacturing and forward logistics.
What one factor can make a strategic difference in Service Supply Chain Optimization (SSCO) between good and superior results?
It’s the Conversation between the agent and the end customer – either as a result of proactive outreach to the customer or at the pull of the customer to solve their problem.
If the service supply chain readily exposes any shortfall in a company’s processes, the Conversation is the opportunity to address these systematically — by empowered listening and by conversation enhanced with technology, systems, training, proven decision-trees, best practices, problem–solving skills and a sense of urgency.
Everything else in SSCO is getting ready for the Conversation — like an air traffic controller always ready to provide guidance for a successful landing. The advanced planning starts with the question: what are the decisions, backed by data, required to make the Conversation successful?
Scenarios may include:
- “I need service. The product seems to work as expected for all features except one — automatic backup functionality” (from the end customer)
- “I am calling to inform you that our remote-diagnostic-software indicates that your product needs service. I recommend that we schedule a technician this week – as preventative service to avoid potential disruption…” (proactive communication from the company agent)
- “Before I try to schedule service, can you validate my warranty by specific products that I’ll list? Some products are 4-hour response. Some are next-business-day. I also have a special contract clause not requiring us to return certain hard drives…” (from the end customer)
Frequently, the Conversation deals with the moment of truth between the agent and the end customer – the moment when things are not likely to move sideways, but to get much better or much worse. It can result in a shift in customer attitude — from “concern” that the service part is not available in the required time to “trust” that the problem is scheduled for a solution. The successful conversation can instantly generate a shared purpose between the agent and the end-customer: to fix the problem, provide the service on time, reduce customer risk, or to avoid customer costs.
Finally, the successful conversation is “added value,” that is, done right the first time in a way that transforms the experience of the customer and creates outcomes that the market will pay for…a conversation that is planned, but never leaving the end customer feeling manipulated.
Now…what’s achievable? Let’s look at results from two case examples, with results slightly changed to protect the confidentiality of Clients.
- Case 1: Even with considerable planning, a conversation can unravel. Customers can opt-out of the process and opt-out of the conversation – and escalate directly to, let’s say, a VP or President in the service company’s organization. What is a realistic goal? Six-sigma level performance is achievable – fewer than four such instances out of each one million opportunities to serve the end customer.
- Case 2: Some companies have a strategy to get as many customers as possible better educated on their products and services – with the expectation that more educated customers may be less likely to:
- trigger unnecessary service events
- return products that turn out to be “no-trouble-found”
- require extra support from Customer Care
- switch to competitors’ products and services
This idea is not misplaced, especially in building an integrated approach to Service Supply Chain Optimization. In this case example, the company ran diagnostic market research to identify opportunities and conducted a focused campaign to educate customers. Finally, they executed a second proactive-outreach campaign, “education-on-education,” to try to close any remaining gaps. The result: 91% of the customers were “champions” in recommending the company to their colleagues – a rating of 9 or 10 on a scale of 1 to 10.
Creating the environment for other Conversations, using the same principles, is also important:
- between the agent and parts suppliers
- between the agent and tech providers
- with the client Chief Services Officer, CFO or Executive Team
In Service Supply Chain Optimization, getting ready for the Conversation is the job that never ends, supporting a company’s goal to have the Conversation leading to timely decisions based on the right information that drives the right outcome, every time and for every sub-process of SSCO.