by   |    |   2 minutes  |  in Service Management   |  tagged ,

ind_aftermarket_service_purple_002875No… and yes. After-market customer service is a critical component of long-term commercial and business success. And today more than two-thirds of employees work in the service sector. But, yes lots of time is wasted in the inefficient delivery of service. Let me explain.

The economic imperative to provide customer service is simple. The profit margin on equipment-based service is higher than that of the initial sale, in most product categories. And it costs more to acquire a new customer than to retain an existing one. Four to twenty times more, depending on whose numbers you believe. Whichever one applies to your situation, it is a significant multiple. So, it would be madness not to focus on delivering great service and ensuring long-term customer loyalty.

“Time is money” so the saying goes. Paul Krugman, Nobel Laureate and American economist, argues that “Productivity isn’t everything, but in the long run it is nearly everything”. And rising productivity has certainly contributed significantly to increased prosperity and living standards. See Tim Colebatch’s report in the Sydney Morning Herald for a useful explanation in relation to service sector workers.

So why do many service organizations ignore the fact that time is the one resource they cannot stretch or replicate or replace, and invest in skills-building and tools to ensure that their technicians, their office staff and the processes conserve it and therefore save money? Many talk about the need to improve utilization – the windshield to wrench-time ratio for mobile technicians – but are unsure how to achieve it beyond increasing the intensity and exhorting their teams to “work smarter not harder”.

We are convinced that a key input will be to rethink the decision-making processes and workflows that underpin the inevitably complex world of aftermarket services in order to eliminate latency and time wasting, and to optimize delivery. In much the same way that the manufacturing sector was revolutionized by management techniques such as lean thinking, just-in-time and six sigma quality initiatives. All of which involves investment in people, tools and technology as critical enablers.

Don’t waste any more time. Tomorrow’s transformation starts here and now.

 

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