This week, we present Chapter 9: Consumption Services: Will They Someday Own “The Number”? This is the tenth post in a series dedicated to helping MSPs understand and adopt the recommendations of Consumption Economics–The New Rules of Tech. Chuck introduces the chapter by sharing how the content resonates with his 30+ years of industry insight.
A FEW WORDS FROM CHUCK
Chapter 9 of Consumption Economics reminds me a saying I have heard throughout my entire career, “A sale happens once, but customer service happens every day!” In the new world of customer-driven technology consumption, this says it all! If you haven’t noticed already, your sales team is no longer the driving force behind closing deals. Your “service” organizations – professional, technical and customer – are the superstars driving sales and represent the primary revenue generators.
It is a concept that is hard to grasp; one that was foreign, until recently. The people in your sales organization – the ones who know a product’s features and functions, and physically close the initial deal – will no longer be recognized as the “rainmakers” in your company. It is the people in your service organizations – the ones who interact with the customers, witness their struggles, and help them learn how to use the products by listening intelligently (as discussed in Week #7) – who will be generating the majority of new sales.
Customer service isn’t a new concept. What is “new” is the fact that customers are demanding service…EXCELLENT service. Today, “good enough” products and extraordinary customer service trump exceptional products and mediocre customer service. It’s that simple. If several employees become proficient using your product they will spread the word – leading to more consumption and more sales. Conversely, a frustrated employee having difficulty with your product because no one is helping them “after the sale” will, undoubtedly, negatively impact future sales of your product.
So think about this carefully as this pertains to your company. Who will “own” the revenue targets you set? Will it be the employee who interacts with the customer once or twice? Or will it be the people who support your customers every day? Your answer and how you act on it will profoundly impact the future success of your company. Read on for more information.
AN EXCERPT FROM Consumption Economics—The New Rules of Tech
Chapter 9: Consumption Service: Will They Someday Own “The Number”?
Perhaps nowhere is the need to transform more important, more urgent, or more delicate than in the services realm. Why? Well, we have two major corporate problems that will fall into the laps of the people who set service strategy.
Here is our first service problem: We have billions of dollars in industry profits at stake on a value proposition that is running out of steam. Customers feel like they are held hostage by it, and quite honestly, who can blame them? It is our products that are complex, hard to use, hard to customize, and that require constant attention to keep running. The idea that customers are spending a huge percentage of their budgets to pay us to deal with a problem that we created seems a bit absurd. We need to switch the value proposition of product-attached service offers while the plane is still in the air. If we don’t, the Golden Egg is going down with the plane. No one can let that happen. No one.
Problem number two is about the gaping hole in our Consumption Model strategy. We currently have no capability in sales or services to effectively help grow the customer in the age of Consumption Economics. The risk shift puts the onus on us to help customers through this pay-as-you-consume evolution, yet we have no group charged with guiding them through it and, in return, capturing the maximum dollar value of their future spending for our company.
Services of all types — professional services, education services, customer support, field services, managed services, outsourcing services — need to move beyond technical expertise. They need to move beyond installation and maintenance. They need to move beyond being cost centers. They need to move beyond being considered simply “product attachments” by Wall Street. They need to break out of their shells in order to protect and defend their current golden revenues, and to answer the company’s call for someone to own “growing the trees” in our cloud customers.
How are we going to do this?
We are going to move services from the center of the customer lifecycle to both of the edges. We are going to repurpose the asset toward new skills and new offers. We are going to take on consumption optimization and the realization of customer value as our main jobs. And services organizations are going to end up owning the customers and owning “the number.”
The goal of Consumption Services is not just to remedy the risk that customers took to get the product to a minimally acceptable level of value. The goal is to take them all the way; to help every customer realize the maximum business value that our whole product and services portfolio can provide. We need to align our service assets with the true requirements that our customers have — to help business buyers get business outcomes and help end users get personal productivity and enjoyment outcomes. In achieving their goals, we also will achieve our own.
NEXT WEEK: Chapter 10: Customer Demand vs. Capital Markets: How Fast Should You Transform?
Because D3UC is dedicated to and entrenched with the MSP community, each week a new chapter of Consumption Economics will be discussed with emphasis focused on the challenges faced by VARs and MSPs who are transforming their companies’ business models to survive and thrive in the new, Cloud-driven world.
If you would like an overview of the book Consumption Economics, you can download a copy of the “abridged” version written by the TSIA from our website.
Originally published July 5, 2015. Reviewed November 2016.