Service Excellence: Strategic Differentiator and Enhanced Profitability for Equipment Dealers

Transcription

1 Service Excellence WHITEPAPER Service Excellence: Strategic Differentiator and Enhanced Profitability for Equipment Dealers A best practices guide for Forward Looking Equipment Dealers to optimized Customer Service Abstract Equipment dealers are facing both challenges and opportunities in Service and Product Support. The servicerelated opportunities and challenges invite dealer executives to scrutinize their current operating practices. This whitepaper presents a series of best practices. It also highlight the role a modern business system and mobile field service application can play in optimizing your service processes and profitability.

2 Opportunities and Challenges in Service Equipment dealers face several opportunities and challenges in the Service area! Service is oftentimes looked upon as the tail-end of the business. Many service departments are excellent at fixing broken equipment. Yet in the larger scheme of the dealer business, the service department has a more strategic role to play. Dealers have the opportunity of turning their service department from a cost center into a profit center. They have the opportunity of elevating their customer service into a strategic and competitive differentiator. On the other side dealers also face service-related challenges. Customers are increasingly demanding. Fleet owners expect maximum equipment availability and utilization. Large fleet owners exert downward price pressure. Meanwhile equipment has become highly sophisticated, requiring specialized technical skills. For certain competence areas, qualified staff is hard to find and attract with premium labor rates as a result. The service-related opportunities and challenges invite dealer executives to scrutinize their current operating practices. In this whitepaper we will present a series of best practices. We will also highlight the role a modern business system and mobile field service application can play in optimizing your service processes and profitability. The Service Opportunity Most equipment today is of excellent quality, versatility and sturdiness. Product differentiation has become increasingly challenging and price competition commonplace. Fierce competition between brands puts sales margins under pressure. And large fleet owners dealing with OEMs directly, eats into dealer new equipment sales opportunity. Your Service department represents a powerful weapon turning these challenges into opportunities. What customers will best remember you for is the service level of your organization. Quick and adequate repair of their equipment, consistent high-quality service and reliable operation of their fleet is one of your best differentiators. Satisfied customers tend to be loyal and repeat business generates higher margins. Moreover, your technicians operate in the front-line and are your eyes and ears in the market. They are able to spot opportunities before your competitor will. With an efficient and high-

3 quality service organization you are well positioned to contract major service and maintenance work for large (rental) fleet owners. Many of them are ready to subcontract or outsource service and maintenance to a specialist. The following simple statistic, demonstrates the importance of service and the size of the opportunity it represents. For every new unit being sold, a multiple of 20 or 30 units are in operation at any point in time, requiring service, maintenance, parts and upgrades. Installed-base-to-new-unit ratio: - Average: 13 : 1 - Locomotives: 22 : 1 - Tractors: 30 : 1 - Civil aircraft: 150 : 1 (Source: Harvard Business Review, October 1999). When looking at the initial acquisition cost of equipment as a percentage the overall life cycle cost it represents only a 10% portion; 90% of the life cycle costs are service related (Source: Accenture, 2005). These figures combined, illustrate the importance of equipment service. Capturing a larger share of this overall revenue opportunity and managing it more profitably, makes both top-line and bottomline impact to your dealership. The Service Dilemma Your Service department, including your technicians, dispatchers and service managers, probably represents one of the hardest working teams within your organization. They are always on call, rushing against time, and dealing with customers who can t wait for their machines to get back into production. Whilst they are probably your best customer advocates, customer satisfaction ratings for your company s service may still leave room for improvement. Whilst nobody would argue its hard-working nature, you may still find the Service department s profitability to be a challenge. The difference between profit and loss can be as simple as missing a manufacturer s warranty for a replaced component or dispatching an overqualified person for a particular job.

4 From working closely with many equipment dealers, e-emphasys learned that the key to unlocking this dilemma is not working HARDER, but operating SMARTER. Being smart about service is the difference between a satisfied and a grumbling customer, between long term loyalty and luring attrition, between profit and loss. With today s insight and technology, service excellence is within reach for your organization. The Service Productivity Game The winners in the service arena will be the companies focusing on service productivity. This means working smarter rather than harder, operational excellence beyond diligent fire fighting. The question that each dealer executive and service manager should ask himself is whether or not their service department possesses the infrastructure for efficient and effective job execution. Most technicians carry an expensive tool kit, but are deprived of essential information on the job. Most dispatchers are very proficient with telephone, fax, and service board, but lack the real time interaction with the field. Most executives have an excellent feel for the performance of their business, but have limited management information for analysis and decision making. Superior service productivity starts with a system which pulls it all together, and addresses the tactical issues, disconnects and inefficiencies within the business process. Best Practices Integrated Customer Interaction With today s communication technology, customer interactions happen through a variety of channels, including telephone calls, reports from an onsite technician, submissions from the web, , fax, automatic updates or calls from equipment with on-board monitoring and satellite communication capability. Every customer interaction is an opportunity to increase customer satisfaction and possibly get an order. However, for most dealers keeping track of these interactions, and creating a 360 degree customer view provides a challenge in itself. Dealers can therefore gain value integrating their customer touch points and providing their employees with visibility of customer contacts and fleet details and history to get a full picture of the customer s activity and potential needs. Being able to anticipate needs and predict or prevent problems, upgrades the customer service relationship from pure fire fighting to a more pro-active partnership. At the same time it helps dealers to decrease the need for expensive and disruptive emergency service calls. By automating the capture and response to requests through tools such as remote access, workflow, automated escalation and integrated e- mail, companies are ensuring that customer calls are captured and addressed in a timely and adequate manner.

5 Call Efficiency Margins on services business are highly dependent on keeping costs in check. Dealers that are building a knowledge base of problems, causes, resolutions, and occurrence rates, combined with OEM service bulletins and share this information with their service representatives, are able to support their customers more effectively whilst improving call efficiency. By providing information that can be quickly searched for relevant answers, the time spent with customers is more productive and provides more value. If a customer can find the answer to their problem or question through self-service, customer satisfaction can come at a significantly reduced cost. By providing customers and customer service representatives with broad access to product and service-related knowledge, on site service visits can be reduced and the cost of the technician and related overhead expenses saved. Intelligent Scheduling and Task Combination A dealer executive recently stated: Skilled technicians are becoming a scarce commodity, and you certainly want to make best use of their time. Intelligent scheduling, skill matching, parts availability verification, route optimization and combining of tasks provides great opportunity for optimized utilization of technician s time and capability. Furthermore, emergency calls and equipment swaps always have a disruptive effect on dealers and customers operation and come at high cost. Reducing those through planned maintenance or repair, and moving load from peak to off-peak times contributes to customer satisfaction and improved efficiency. By providing the technician with the right information about the customer and upcoming service, technicians can often combine tasks and save on the total number of trips required. Intelligent scheduling tools are a great aid for service desks also. Moving from an on-the-wall service board to an electronic scheduling solution helps improve service desk productivity and effectiveness whilst maximizing productive time spent advising customers. Service Order Prioritization Service orders should be prioritized based on customer need, but also on the value of the customer and the service level that the customer has paid for. Nobody wants to leave a customer in need, but knowledge of the contracted service agreement can allow company representatives to properly prioritize limited resources to the appropriate customer. Customers that continually request urgent responses outside of their service levels can be targeted for an upgrade to their service plan and provide more income for the company. Any service calls that are trending towards an SLA violation or customer service failure should be alerted in advance and the appropriate person notified while there is still time to address the problem.

6 First Time Resolution Rate By closing the call the first time, the number of service calls can be reduced, customer satisfaction increased and the call-to-cash cycle shortened. Fixing the problem the first time requires the right technician, with the right knowledge, the right parts, the right tools, the right customer data and the right equipment information in hand. By having predefined job templates for problems, outlining the appropriate actions, tools and parts required to make the correction, service technicians can show up prepared to get the job done right. Online visibility to the equipment, the service history and the call history, enables the technician to accurately and quickly diagnose and resolve the issue. Closing the call means customer sign-off, invoice release and expedited cash collection. Technician Productivity The service technician is critical to resolving customer problems, but also to maintaining service history and reporting time and material information for billing. Reducing the amount of time spent on paperwork through automation, enables the technician to spend more time on the job, reducing employee expenses from overtime and hiring additional technicians. Mobile technology and self-service capabilities can significantly reduce the air time technicians spend with the service desk, thus freeing up time on both sides. Keeping technicians updated of schedule changes in real-time, helps develop and maintain a responsive, productive and nimble service organization. Source of Opportunities Companies with service personnel trained and equipped to spot sales opportunities can add a significant new source of revenue. Service desks and field technicians that have visibility to contract expirations, upgrade availability, promotions, and complementary attachments or supplies can increase customer satisfaction as well as sales revenue. Upfront notification of potential opportunities will enable service personnel to look beyond the mere servicing of equipment. Modern business systems can further optimize the capturing and timely follow-up of opportunities by the sales department. The most expensive part of service may be sending a technician; any additional work will come as profit. Call-to-Cash Perhaps one of the best ways to increase the profitability of services work is to enable the service technician to create an invoice on the spot, starting the payment cycle immediately. Equipment dealers tend to sit on large numbers of open service orders. Invoice cycles of days after service order completion are fairly common, with obvious cash flow effect. In addition to being paid earlier, the service technician can get approval at the time of the service. Part numbers, time and expenses are much more accurately reported when captured

7 quickly. To generate an accurate invoice in the field requires online access to contract, warranty, service history, call history and customer information. Leaving customer premises with an approved invoice prevents errors, disputes and credits, and impacts cash flow positively. Creating an inaccurate invoice, however, may be worse than delaying the invoice. Modern service applications fully automate this process, expediting the process and minimizing efforts required by technicians. Revenue Leaks Revenue leaks occur when customers are not billed for services they should pay for. The goal is to give the customer everything it is entitled to, at the same time invoicing everything the dealer is eligible for, thus leaving money on the table. Due to fragmentation of information, paper based processes and time delays, many dealers face revenue leaks for expenses which go unreported and/or are not billed for. Revenue leakage is difficult to identify after the fact. It usually occurs in small but frequent occurrences, and requires access to detailed history and account knowledge. Similarly, supplier warranty information must be readily accessible, integrated and easy to understand in order to track returns and refunds. A systematic approach and supporting business solution can provide significant benefit in recouping out of pocket expense and lost revenues by providing visibility and eliminating guess work. Customer Relationship Customer satisfaction is extremely important to building long term relationships. Moreover, repeat business usually generates much greater profitability, due to the cost involved in acquiring a new customer. By enhancing the service offering with preventive maintenance, remote equipment monitoring, and failure analysis, dealers can do more to provide customers with superior equipment availability, reliability and performance. Moving from a break/fix relationship to the earned status of trusted advisor and value-added service provider oftentimes represents a ticket for future business. Lead Generation Many dealers have professionalized to the point where they are running or have the desire to run target market campaigns for lead generation. The critical element for successful marketing campaigns which tends to be missing at most dealers is a customer database which structured and quality information. Leveraging your service organization by having it collect and report fleet related information (size, mix, brands, age, life cycle cost, maintenance history) as part of their regular duties, helps your organization build the customer intelligence necessary for running highly effective and targeted campaigns.

8 Proactive Management Through increased visibility into the service business, dealers can gain better control, find bottlenecks and make better management decisions. Today most dealer organizations rely on reports that show history after the fact. With better information and business intelligence tools, your management team becomes more proactive through alerts, real-time information visibility, trend analysis, and performance indicators. With better grip on your business, your management team is in a better position to improve both top line performance, control cost and make a bottom line difference. Bottom Line For many dealer organizations the above presented best practices represent an excellent way to evaluate and improve existing service processes. Successful implementation of these best practices may require adoption of modern business software, tailored to the needs of the service business and equipment industry. extend is the most comprehensive and modern Dealer Business System (DBS) in the market today with extensive equipment service management capabilities. extend enables forward looking dealers to re-invent their service organization and turn it into a strategic element of their business. extend provides your service organization a powerful infrastructure to position well for the future and drive bottom line results: Lower service costs & increase service-driven sales. Improve first-time fix rates & increase customer satisfaction. Enhance field service visibility & reduce unnecessary inventory. Improve business processes & enable better decision-making. Improve employee satisfaction & retain critical service knowledge. For more information on extend, please visit:

9 About e-emphasys Technologies extend is the first Dealer Business System for modern and professional Equipment Distributors, and based on a proven and flexible Enterprise Resource Planning foundation. Modern and professional Equipment Dealers have outgrown the capabilities of traditional Dealer Business Systems. Today s business requires nimble, integrated and intelligent dealer organizations. Customers are demanding and competition is tough. Dealer organizations are as flexible and intelligent as their systems enable them to be. In extend, dealers model their organization and business processes unique to their situation without force-fitting. Dealer employees collaborate by sharing activities and information. extend obliterates islands of information and automation, unnecessary paperwork and redundant data entry. It provides seamless integration with the OEM, and an accessible portal for instant and round-the-clock ordering and inquiring. extend enables decisions to be taken faster, better informed and with more impact. In today s equipment industry, the fit survive but the smartest thrive! e-emphasys Technologies, Inc. is a global provider of enterprise solutions serving customers worldwide, ranging from 25 2,000 users. Strategic focus at e-emphasys is extend for Equipment Dealers. e-emphasys employs a staff of 175 highly qualified professionals and has a close partnership with Infor Global. e-emphasys offices are located in Cary (NC- USA), Tokyo (Japan), Mumbai (India), Apeldoorn (The Netherlands).